More than 1,100 current and former military personnel in Washington will be eligible to share in a $70 million multi-state settlement signed by Insurance Commissioner Mike Kreidler over the improper sale of insurance and investment products on military bases.
The settlement, by Waco, Texas-based American-Amicable Life Insurance Co. and its two affiliates (Pioneer American and Pioneer Security) stems from alleged violations of insurance and consumer protection laws in the sale and marketing of life insurance products to military personnel dating to Jan. 1, 2000. Among the most significant violations, some of the term life policies were represented as investment products.
Kreidler said 1,145 current and former Washington policyholders are covered by the settlement. They include:
• 639 policies issued after Jan. 1, 2000, that are no longer in effect. This group will receive cash refunds.
• 235 policies issued after Jan. 1, 2000, that are still in force. This group will receive cash refunds and an increase in cash surrender value.
• 221 policies issued prior to Jan. 1, 2000, that are still in force. This group will receive an increase in cash surrender value.
• 50 polices issued to civilians that are still in force. This group will receive an increase in cash surrender value.
The distribution of cash refunds will be proportionate to premiums paid, after a $100 payment is made to every terminated military policy sold after Jan. 1, 2000.
The settlement was negotiated by insurance regulators in Texas and Georgia.
In addition, insurance regulators in Florida, Illinois, North Carolina and Virginia conducted an extensive examination of the companies, identifying a laundry list of improper business practices that the companies agreed to change. The companies are banned from military bases for five years, and prohibited from using any military personnel listings for sales or solicitation purposes.
Policyholders with questions regarding the settlement should contact the company directly at 800-736-7311.
In an unrelated settlement also involving the sale of life insurance to military personnel, Kreidler announced that nine Washington residents who hold or held Boston Mutual Life Insurance Co. policies will share $2,105 as part of a multi-state agreement.
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